How Much Oil Does Iraq Have?Iraq Memo #16, May 12, 2003
Gal Luft, Co-Director, Institute for the Analysis of Global Security (IAGS)
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Over the past several months, news organizations and experts have regularly cited Department of Energy (DOE) Energy Information Administration (EIA) figures claiming that the territory of Iraq contains over 112 billion barrels (bbl) of proven reserves—oil that has been definitively discovered and is expected to be economically producible. In addition, since Iraq is the least explored of the oil-rich countries, there have been numerous claims of huge undiscovered reserves there as well—oil thought to exist, and expected to become economically recoverable—to the tune of hundreds of billions of barrels. The respected Petroleum Economist Magazine estimates that there may be as many as 200 bbl of oil in Iraq; the Federation of American Scientists estimates 215 bbl; a study by the Council on Foreign Relations and the James A. Baker III Institute at Rice University claimed that Iraq has 220 bbl of undiscovered oil; and another study by the Center for Global Energy Studies and Petrolog & Associates offered an even more optimistic estimate of 300 bbl—a number that would give Iraq reserves greater even than those of Saudi Arabia. In a Guardian interview before the war, Taha Hmud Moussa, Saddam's deputy oil minister, said that all of Iraq's oil reserves "will exceed 300bbl when all Iraq's regions are explored."
If true, this would mean that Iraq has roughly a quarter of all of the world's oil. These assessments have been repeatedly cited in news articles, conferences, think tank briefings, congressional testimonies, and academic works because they raise the prospect that America's energy security could significantly improve if Iraq were able to challenge Saudi Arabia's position as the world's preeminent oil producer.
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It is particularly important to verify the estimates of Iraqi reserves since the DOE figures stand in contrast to those of an equally reputable U.S. government organization. In its 2000 World Petroleum Assessment, the Department of the Interior's U.S. Geological Survey (USGS) presented figures based on extensive geologic studies by a team of more than 40 geoscientists claiming that, as of the end of 1995, Iraq had 100 bbl of proven reserves, of which 22 bbl had already been recovered. Hence, according to the USGS, Iraq's current proven reserves amount to only 78 bbl—only two-thirds of the DOE's more commonly accepted 112 bbl estimate.
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The discrepancies between the United States' two chief government agencies dealing with energy assessments are so sharp that they present entirely contradictory images of Iraq's oil potential. If the DOE data is right, then Iraq has the world's second largest proven reserves. On the other hand, if the USGS figures are right (and they are also endorsed by the 2002 Energy Outlook of the Paris-based International Energy Agency, whose projections are recognized as authoritative throughout the energy world), then Russia would be second, with roughly twice the reserves of Iraq.
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Since the OGJ admits that it is not qualified to assess the validity of the information, its estimates should be taken with at least a grain of salt—which raises the question of why the DOE prefers to use data from a commercial publication rather than data derived in a more statistically and scientifically defensible manner by a fellow government agency.
IRAQ'S OIL RESERVES
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As for undiscovered reserves, external auditing is even more difficult and Iraq's claims are even more dubious. Issam al-Chalabi, Iraq's oil minister from 1987 to 1990, admitted in the March 24, 2003 issue of the OGJ that Iraq's oil figures are "preliminary in nature since work was often interrupted by political problems, and the technology used is now outdated." Large parts of the country, especially in Iraq's Western Desert and its northwest, are still untapped and need to be explored. This is where the DOE and USGS really part company. According to the DOE-EIA's Iraq web page, deep oil-bearing formations located in the vast Western Desert region could possibly yield as much as 100 bbl. This again contrasts with the detailed data of the USGS, which suggests only a 50 percent possibility of 6.6 bbl in Iraq's Western Desert petroleum system. Even under its most optimistic scenario, the USGS predicts no more than 14 bbl coming from this area.
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However, there are some facts that are undisputed. First, Iraq has considerable oil reserves and low production costs. Second, because of Iraq's isolation over the last decade—during which exploration technology has greatly improved—there has been almost no use of the most sophisticated exploration techniques such as seismological surveys, magnetometers, and sniffers in Iraq. Furthermore, most of the fields have not been explored down to the deepest layers of the ground, where plenty of oil can be found. Out of the 74 fields that have been discovered and evaluated, only 15 are actually operating. In addition, there are 526 prospective drilling sites in Iraq today, but just 125 of them have actually been drilled. Of those, 90 have shown potential as oil fields, but only 30 have been even partially developed. This means that once on the ground with sophisticated exploration tools, petrogeologists could establish in relatively short time a far more accurate picture of the scope of Iraq's reserve than the one we have today.
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It is unlikely that Saudi Arabia, which is heavily dependent on oil revenues and in serious financial straits, would agree to transfer a significant portion of its production quota to Iraq. Riyadh's reluctance might prompt Iraq to seriously consider leaving OPEC, because Iraq will have a tremendous need to pump as much oil as possible to pay for its recovery. Moreover, Washington might strongly encourage such an Iraqi move, since any competition with OPEC would likely increase oil supplies, thereby lowering prices.
However, if Iraq remains a member of OPEC, as seems more likely, the negotiations over its quotas are likely to take years and to be tied into the gradual increase in Iraq's production capacity. Iraq is unlikely to exceed its standing but dormant 3.2 mbd OPEC production for roughly five years, pushing off the need for the kind of hard choices that will be required to deal with this thorny issue. As this process unfolds, it is essential to engage in a comprehensive evaluation of Iraq's oil endowment to put the record straight using fresh, reliable, and widely accepted information produced by scientific methodology, not the wishful thinking of a deceitful regime.
http://usgovinfo.about.com/gi/dynamic/offs...://eia.doe.gov/ QUOTE
Oil Oil Oil Natural Gas Natural Gas Natural Gas Natural Gas
(Billion Barrels) (Billion Barrels) (Billion Barrels) (Trillion Cubic Feet) (Trillion Cubic Feet) (Trillion Cubic Feet) (Trillion Cubic Feet)
Country/Region BP Statistical Review2 Oil & Gas Journal3 World Oil4 BP Statistical Review2 CEDIGAZ5 Oil & Gas Journal3 World Oil4
Region Fipscd Year-End 2005 January 1, 2007 Year-End 2005 Year-End 2005 January 1, 2006 January 1, 2007 Year-End 2005
Middle East Cyprus CY 0 0.000 0 0 0 0.000 0
Middle East Iran IR 137.490 136.270 131.500 943.922 974.694 974.000 965.000
Middle East Iraq IZ 115.000 115.000 115.000 111.901 111.949 112.000 84.000
Middle East Kuwait6 KU 101.500 101.500 100.875 55.492 55.515 55.000 57.000
Middle East Oman MU 5.572 5.500 4.790 35.124 35.138 30.000 27.055
Middle East Qatar QA 15.207 15.207 20.346 910.140 910.527 910.500 906.000
Middle East Saudi Arabia6 SA 264.211 262.300 262.175 243.570 243.674 240.000 243.500
Middle East Syria SY 3.000 2.500 3.000 10.943 10.948 8.500 12.758
Middle East United Arab Emirates TC 97.800 97.800 70.250 213.036 214.185 214.400 205.550
Middle East Yemen YM 2.850 3.000 2.970 16.909 16.916 16.900 17.000
Other-Country Not Specified 0.081 Not Applicable 0.738 1.836 Not Applicable Not Applicable 13.700
Middle East r5 742.711 739.205 711.644 2,546.048 2,578.560 2,566.038
CRS Report for CongressReceived through the CRS WebOrder Code RS21626Updated April 13, 2005Iraq Oil: Reserves, Production, and Potential Revenues
Lawrence KuminsSpecialist in Energy PolicyResources, Science, and Industry Division
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Summary
Iraq’s potential oil wealth remains largely unrealized. Substantial proven reservesexist, and there are likely more resources awaiting discovery. But oil production hasbeen slow to fully recover during the post-Saddam period, and manyobstacles stand inthe way of achieving a stable export flow. Moreover, refineries are in need ofrehabilitation, necessitating imports of gasoline and cooking fuel within Iraq.Despitethesedifficulties, theexistenceof vastresourcessuggests easyexploitationand lucrative export earnings that could help fund Iraq’s redevelopment. But the sheerresource sizemasks the difficulty, described inthis paper, of generatingexport revenuesthat could fund reconstruction and development and offset several appropriationsapproved by Congress. This report will be updated as events warrant